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You just graduated from college and have now joined the real-world workforce. Congratulations! Now you can really be the boss babe you are meant to be. 

At this point in your life, when you’re in your 20s, it’s easier to really prioritize spending for your business or career, and for the things you enjoy doing, like reading, traveling, hanging out with friends, and adventure trips. These are great ways to spend your money because why else will we work if not to enjoy life? 

There is one thing though that twenty-somethings fail to prioritize because they feel that they’re still too young. They fail to save and invest for their future. And by the time they start investing, rates are higher and it can be a struggle to keep up with those rates. 

Devising and starting an investment plan early is a great way to develop a safety net, plus you’ll get better returns by the time you retire. And there are a lot of advantages to investing early.

  • Your spending and saving habits will improve
  • You’ll be better prepared financially in case your finances become unstable 
  • You’ll be able to keep up with money inflation
  • Compounding returns will be to your advantage
  • Retirement will be less scary and can even happen earlier

What can you do now to start saving and investing early? 

  • Payoff your student loans and debts

Paying off your student loans and debts early helps you stay on top of your finances and helps you have more money later on. It’s so much better to have limited funds in your 20s to make way for more money in your 30s and 40s than to have more money now and struggle to pay off the loans, debts, and interest in the future. Paying off your debt now will also allow you to save more money that you can invest to have even greater returns!

  • Set savings goals. Set 5-10% of your income. Set Aside Money for Future Investments

Just as you sit down at the start of the year to set your new goals, set aside time to set your savings and money goals, too. Decide what amount you want to have by the end of the year. Then set aside 5 to 10% of your income. It’s always best to have automatic settings to transfer this amount to an untouchable account so you automatically save the money.  Once you get the hang of that, set aside a little more for future investments. 

  • Create a budget and track your spending. 

It’s always a good idea to start great money habits. Create a budget according to the amount of money coming in to your account. A good rule of thumb is to allot 70% of your income for your living expenses and debts, 20% to your savings, and 10% to your emergency fund. But if it’s not possible, have 10% automatically transferred from your main account to your savings account. And always track your spending so you know exactly how much money you have. Create a spreadsheet or use an app your phone to list down all the money you receive (from salary, gifts, winnings, bonuses, etc) and all the money you spent. It’s scary but necessary to create a healthy relationship with money. 

  • Set goals and make investments based on those goals. Research before you invest. 

If you want to start investing, do your research. Ask people you trust. Do a Google search. Join Facebook groups that focus on investing. Visit websites. Read the newspaper. Consult with brokers about your best options. Look also into investment life insurance, especially if you want low-risk options for now. 

  • Don’t keep up with the Joneses. Avoid debt as much as possible

While you’re in your 20s, avoid unnecessary debt as much as possible, which includes credit cards. If you must use it, think ten times before you need to use it. And when you’ve thought ten times, create a plan on how to pay it off without incurring too much interest. A lot of credit card debt is due to impulse spending. Cutting out the impulse spending at the onset will lead to better spending habits. 

Have you started investing? When did you start and how did you start? 

It’s always a good idea to practice better money habits as early as you can. Your friends might not understand your decision and your plan but it’s your life, boss babe. And you’ve got big dreams. You need to figure out the best way to live it, short-term and long-term.

Good luck!